Older renters who have already put down a deposit for a house could benefit most from the federal government's first homebuyer scheme.
Under the Help to Buy scheme, the Commonwealth would contribute 40 per cent of the value of a home for a new property, or 30 per cent for an existing one, allowing tens of thousands of first homebuyers to enter the market with as little as a two per cent deposit.
Though the shared equity proposal has already passed the House of Representatives, it is yet to reach the Senate, leaving its future up in the air.
The Greens and some economists including Peter Tulip from the Centre for Independent Studies believe the scheme does not go far enough.
"It's trivial," Dr Tulip told a Senate committee on Tuesday.
"We're talking about 40,000 places in a housing crisis that's affecting millions of households.
"The government has a target of 1.2 million houses ...this doesn't amount to a rounding error on that target, this is a distraction from the big issues."
However, Grattan Institute program director Brendan Coates said the scheme should pass as it would still help Australians own homes, particularly older people renters who are at risk of poverty.
"Yes (the scheme) will help first-time buyers, but I actually think the bigger benefit is helping older Australians," he said.
"They may have a deposit but they're not going to be in the workforce long enough to pay down the full value of a home by the time they retire."
Those who are 50, for example, may only work for another 15 years or so, which makes paying off their home difficult.
But if they only have to pay down 70 per cent, and they already have a government-sponsored deposit worth 30 per cent, it is much more feasible for them to pay off their home during their working life.
This would prevent them from having to rent during retirement when the median rental property costs about $25,000 per year while the aged pension maxes out at about $28,500 for a single each year.
However, the Help to Buy scheme is not a panacea and it is not without drawbacks, Mr Coates said.
Its income thresholds are too high and mean that about 75 per cent of individuals and 39 per cent of couples would be eligible when only 10,000 places would be made available per year.
"With its broader targeting, the risk is it becomes a lottery," he said.
The government should carefully target the scheme and include it as part of a wider mix of measures.
It could relax constraints on land use to help stimulate construction, for example, or reform property tax breaks like negative gearing and the capital gains tax discount to bring house prices down.
